The Moderating Effect Of External Environment Turbulence In Tourism Sector

Abstract

Tourism sector in Pakistan is facing a situation of severe crisis, plagued by poor management, lack of infrastructure, weak and ineffective policy and implementation. The looming cloud of terrorism has further diminished the role the sector could play in the country and the region's development. Recent military operations against terrorist elements and the inauguration of China Pakistan Economic Corridor (CPEC) are being hailed as a new phase, bringing more opportunities for business. However, it may also bring new challenges to the existing industry as well. The Thailand tourism industry faced similar kind of situation, but it sailed out. The current research paper examined the moderating effect of external environmental factors and relationship of Customer Relationship Management Effectiveness (CRM'e) with business performance and business innovation. A sample of 382 respondents was selected. The respondents belonged to Tourism sector in Pakistan and Thailand. The responses were tested and analysed using Structural Equation Modelling in AMOS. From the analysis it was found that Technological Turbulence, Market Turbulence and Competitive Intensity significantly moderate relationship of CRM'e with innovation and organizational performance. This study is significant as it highlights the importance of external environmental factors for business performance and innovation Vis a Vis the effectiveness of an organization's CRM capability. Results of this study hold significant implications for policy makers and stake holders